The rise of interactive video and what it means for online marketing

Online video isn’t exactly the new kid on the block amongst those the digital industry, but it is maturing into a meaner, tougher kind of service. It is also the one area of display advertising that I’m expecting to flourish over the next twelve months or so, especially in the interactive segment.

It’s no surprise that video in general is on the increase, given that users are continually wanting an engaging experience. According to comScore’s US video metrics, 14.5bn online videos were watched during March this year - a massive 11% increase from February - and I’m equally of the opinion that this trend will be very similar in the UK.

Although a great deal of online video is user-generated content, there remains a large proportion that is not. This crosses over slightly into the realm of IPTV, where the likes of the BBC’s iPlayer and the recent Sky Player continue in popularity. Furthermore, on-demand media services such as Joost or Hulu, (which has just broken into the top three platforms with which users view videos in the US), show no sign of slowing down.

Signs are therefore pointing towards the fact that users are increasingly looking for engaging experiences online, and the more personal, the better. In reality, this notion isn’t actually all that new, but the fact that advertisers need to understand how to successfully use video in the marketing mix is a recent evolution of this line of thought.

For a number of years now, generally the standard video advertising formats within the industry have been either viral, pre- or post-roll, or a straightforward static or automatic-playing video advert as a display campaign; all which are arguably un-engaging (viral to a lesser degree) and often give poor conversion results, whether they’re placed on an internal or external website.

In a recent study by IBM, they were quick to highlight that businesses need to realise that as user expectations of online content shift, any engagement with an online audience needs to match this:

In light of the explosive growth in online and digital media formats, and a corresponding decline in traditional advertising (such as print, TV and radio)... Companies must move closer to adopting an integrated, measurable marketing services model as they identify and adopt the next generation of digital formats."

Organisations continue to push the boundaries of engaging users within websites – a great example being the recent Amazon Windowshop - but I feel there is still a lack of capturing people this way through online advertising. Flash is fantastic, but it does have limits, so I’m going to go out on a limb and suggest that with online video on the rise, there's a massive untapped opportunity for advertisers to embrace this medium successfully, especially given the sudden blossoming of interactive video. So, let’s look at this brave new world of interaction and the possibilities that exist.

Over the next couple of years, making online advertisements engaging to the user will continue to be important; more so when the prediction by eMarketer that more than four out of five (around 80%) internet users will watch online video ads in 2012.

At the moment, technological developments mean that video already has a varying level of engagement and whilst there’s no reason that this won’t develop further, those who are considering running online ads would be wise to consider the options that currently exist.

For example, many of the available types of video interaction are offered by the startup company Quick.tv. These include:

Text or Image Overlay – Where text or images are inserted into, or over, a video. (A good example of this are the pop-up ads that can be found on YouTube).

Chapters - Allows viewers to skip between sections within a video by inserting chapter points.

RSS - Display an RSS feed within your video – this can be automatically updated within a video in real-time.

Tagging/Hotspots - Tag objects in a video with a description. A URL can then be set to drive users to a specific destination when the tag is clicked. This is especially useful for e-commerce, where the user can be taken directly to a product within an online store.

Forms - Insert forms into video ads to gather data from your viewers.

Voting Overlay - Insert voting forms into a video and display the overall results to the user when the video finishes. This is done in real-time.

Videowall - Display numerous interactive videos within the single screen of a video player.

VideoClix.tv presents a great demo of how some of these options look in reality and how easy it is to work them into a campaign:

There are also many other companies that exist who provide these kind of interactive video services, such as coull, liveclicker, ooyala, treepodia and vzaar. So there’s no excuse for organisations not to at least explore the possibility of creating video ads that capture users, especially given the evidence that they’re performance driven.

He also added that in the view of Swiffen, a campaign is deemed a failure if there is an engagement rate of less than 15%. All of the interactive companies I spoke to agreed with this, which is fairly remarkable if you consider that a 10% engagement is generally considered to be fairly high for standard video ads and even less for normal display. Banner ads - and many networked paid search ads - generate far lower click rates.

As if this wasn’t enough, many interactive companies ask only for a fixed fee and/or a CPA rate, which stamps heavily on the worn CPM model and is likely to save the advertiser money against lost impressions.

So, to try and summarise what is a complex but important issue, although online video is being used as part of the online marketing blend, in line with an unarguable increase in user-demand and consumption of video media as a whole, there is an enormous amount of potential to engage users to a far greater degree.

This in itself can increase conversion rates and ensure that any advertising spend is used even more efficiently to deliver both a measurable and justifiable ROI, especially when the ease of implementing efficient tracking and analytical technology into video campaigns is taken into account.

Although there are some great new tech companies flourishing to support and create such interaction, I suspect that we’re only seeing the tip of the iceberg in terms of visual gratification, user engagement and overall use of video within the internet. Who knows what the future holds? All I can suggest is that this is one area that anyone seriously involved in interactive marketing, advertising or e-commerce needs to watch closely in the very near future.

If you know of any other companies offering interactive video services, or can point me towards any recent examples of companies or campaigns that are using this medium, I would be extremely interested to know. Please leave the relevant details in the comment box below.

Comments (17)

Thanks for the great article Jake, very thorough. I agree with much of your premise I just hope that companies who want to generate a serious and comprehensive marketing campaign will neglect other elements of their initiative by getting over engaged with video. It's powerful, can we keep the internet cool? I hope so, there is so much we can do!

That said, I'm a firm believer that an online marketing strategy can have a healthy balance of both fundamental methods (PPC, email, etc) and experiment with newer ideas (such as interactive video). The more that new methods are incorporated, this generally results in a development of their efficiency and an increased understanding of their place in the mix. Roll on the future!

I think our latest campaign with Adidas was quite a cool example of the use of interactive video marketing and getting user to engage with the content. I am not bias either :) Honestly... When our dev guys first got it out, I loved it and play it quite often just to listen to the kickin' track :)

I hope you enjoy it too, imagine that... enjoying an advert... 'there's gold in 'em hills...'

I agree with Andy, we are at the edge of the future, when the crowd realises video can be multi-dimensional and a normal web object with multiple data layers behind it, integrated into the rest of the web, we are going to see a revolution in how we view and use video (blog on user viewing behaviour)

Always good to hear positive feedback from people, thanks. I was (and believe we were), unaware of our mention in your innovation report, very good to know though :) May have been one of those things that hit my Inbox and I was distracted with some server emergency of some sort or other, it happens...

The specific video was part of a much wider campaign, yes you are correct, good to be part of, a funny campaign to work on, might have something to do with the kicking track again :)

Insightful article, Jake. I agree that a lot of work needs to be done with the current, most widespread methods of video marketing in order to be more engaging. It feels like the internet is being overrun with people trying to take advantage of a relatively inexpensive form of advertisement and doing a really poor job of taking user-experience into account. In fact, I would venture to guess that most people find video ads not only intrusive but just plain annoying. My hope is that the true web/video/programming/geek talent out there regains control of the industry and starts utilizing and developing the latest technology, like interactive video, to blow all of the "get rich quick" ad schemes out of the water. I think it's coming and I cannot wait.

Our online video dressing room site, KnickerPicker.com, (http://www.knickerpicker.com/dressing-room.asp) has built some fantastic viral traffic, which is, at least partly, due to interactive video.

The concept is simple: 1. Choose one of five real models. 2. Select some underwear for her to wear. 3. Virtually "try on" the item by moving her around. Walk her forward, turn her around - even "jog" for sports bras.

As well as the great PR and traffic benefits, we have also benefited from some amazing SEO from all the inbound links (roughly 30,000) we get. Try typing "thongs" into Google for example.

Sorry for the shameless promotion. Just thought you might be interested!

Sites with this sort of "personalised" interaction (and the technology that powers it) is an area that is really exciting us. We think there is even more potential for using interactive video to engage users.

Thanks for the contribution... The links you gave have some great content too.

Yes, agreed, it's very important to understand the place of video presently within marketing and how users engage with it, but I also think it's equally important to look ahead and realise that user behaviour can (and most likely, will) shift in this area.

I'm of the opinion that pre-empting change or steering users directly towards new technology and expectations isn't necessarily a bad thing :o)

Thanks again for your points - your presentation is great, by the way!

The 'video on demand' sector - YouTube, BBC iplayer, HULU etc I think is being vastly
under estimated in the current climate and is a massive threat traditional media TV (digital, sattelite or
otherwise).

If someone makes a significant enough break through (like the iPhone for mobile) that changes or succesfully convergies the television experience within the home and appeals to a mass consumer audience, that
would result in a great deal of TV ad revenue technically shifting online very very fast. There are a few things that do this already but none has really reached critical mass, I guess mostly because of the dependency on broadband and current niche appeal.

I think interactive video may be coming before it's time. People are still getting used to the idea of regular video. But if it's appealing enough, interactive video could become a phenomenon and sweep the world. My only concern, as far as using it for marketing, is whether or not it can be integrated on video advertising networks like <a href="http://www.adwido.com">Adwido</a>.

Great article. This is very relevant to our business at Cantaloupe.tv.

Cantaloupe.tv offers a comprehensive, A-to-Z solution for marketing with video on the internet. The Cantaloupe video team specializes in producing authentic web video stories, while Cantaloupe’s online video platform, Backlight 2.0, extends the reach and value of every video. Backlight goes beyond the website, making it easy to integrate video with email campaigns, blogs, social networking sites, search engines, and even sales teams. With Cantaloupe.tv, organizational marketers are finally able to use video to strengthen relationships, boost conversions, and increase sales.

Hope you find our offering a little more intensive because we actually shoot and edit the videos as well as offer Saas Video Content Management Software.

May I add another to your list of interactive elements of a video? How about a video where the central character appears to make a phone call and the person viewing the video gets and actual phone call. We've done it for the NBA's Golden State Warriors and are working on several others. Check out the examples:

You might want to know about TiViPRO : a video services platform for professionals. We help in :

- production (traditional or online)

- delivery (web tv, video site)

- promotion (multi-delivery, SEO).

Regards

over 7 years ago

Tony

Jake,

I recently read your article from June of 2009. I am a Mid-West Bank CEO, and am in posession of approximately 6 interactive internet games. In addition I now have control of the patent pending for the interactive, local capability advertising overlay for all the games. The development costs for this can be verified at approximately 14 million dollars, and a recent appraisal, at liquidation indicates a value of 4.8 million.

If you have any interest or your contacts have any interest please contact me by email.

V180 Media was approached to develop a video campaign to highlight the work Safe Routes Nebraska is doing around the state. We traveled all over the state talking with leaders focused on keeping our kids and families focused on healthy ways.

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you
ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.